KIELCE, Poland --- The 22nd International Defence Industry Exhibition (MSPO), which opens today, is a good occasion to look closer on the ambitious technical modernisation programme of the Polish Armed Forces.

It is worth to remember that Poland is among the very few European countries which have been increasing its military spending for the past years. Poland’s ambitious defence modernisation programme involves getting rid of ageing platforms from the Soviet era and adopting modern, advanced capabilities made by Western defence companies.

The Polish programme is driven by the government’s legal commitment to allocate 1.95% of the previous year’s gross domestic product (GDP) to defence spending, and the growing threat perception due to the ongoing conflict between Ukraine and Russia.

Last year, the Polish government announced that by 2022 it would spend $43.8 billion on technical modernization of the Polish Armed Forces. Of that total, $30.5 billion will be spent on 14 defined modernisation programmes, and the rest will be allocated for procurement of weapon systems and military equipment that are not covered by the mentioned operational programmes.

In addition, Polish President Bronisław Komorowski declared recently there would be a further increase in defence expenditure to 2% of GDP, so as to meet NATO’s requirements; which would add about $300 million for defence modernisation in 2016 and $2.55 billion by 2022.

However, independent research clearly shows that assumptions regarding the availability of funds for the military modernisation process are overly optimistic. Poland’s Ministry of National Defence (MoND) will be able to spend on the defence modernisation process only $30.11 billion by 2022.

Consequently, the Polish Armed Forces will suffer a substantial funding gap, and will have to reduce the scope of its modernisation programme as announced last year. Not to mention the fact that the programme itself requires substantial revision.

Due to the budget constraints mentioned above, several procurement projects seem vulnerable to potential cuts, including the “Modernisation of armoured and mechanised forces” program.

The main aim of the project is replacement of outdated combat vehicles such as the T-72 main battle tanks and BMP-1 armoured fighting vehicles with new armored vehicles based on common modular platform. But, there is a high risk that the programme will be scaled back.

This conclusion is based on several facts. First, additional, second-hand Leopard tanks are entering service, while a contract for 307 additional Rosomak armoured personnel carriers, for delivery by 2019, has already been awarded by the MoND. Finally, the common modular platform is at a very early development stage.

Another programme whose scope can be narrowed is called “Combating threats at sea”. It contains a few procurement projects such as new corvettes (according to the new Polish nomenclature - coastal defence ships), patrol vessels, conventional submarines and support vessels.

In the framework of the programme, the submarine project is the most costly and complex one. It is also the most important from a strategic perspective, because submarines with cruise missiles on board would provide substantial deterrence capabilities and increase strategic flexibility of the Polish Armed Forces to counter any future threats.

However, it seems that the Ministry is not very interested in this type of capabilities. Right now, its intention is to procure submarines without cruise missiles, and in the current situation it is difficult to find a rationale to justify the acquisition of submarines without any cruise missiles. One of the potential explanations could be that decision-makers are interested to procure second-hand submarines, which are not integrated with cruise missiles or may even drop the submarine project altogether.

Finally, there is a high probability that the scope of the purchase of new multi-role aircraft will also be reduced. According to the MoND, Poland is going to procure 64 new multi-role combat aircraft with delivery starting in 2020/2021. Although, the new combat aircraft programme will be mainly financed from the next financial program, after 2022, the procurement of so many platforms is little more than wishful thinking. Despite the promised growth of the defence budget, the shift from lower value, Cold War era platforms to cutting-edge, Western ones will challenge available funding and delay platform deliveries, so this project could well be scaled back. For this reason, procurement of fewer platforms (from 36 to 48 items) is much more probable.

Nevertheless, despite the constraints, with over $30 billion available for available for military modernisation by 2022, Poland will maintain its position as a regional leader in terms of defence modernisation expenditure and offers high market opportunities for Western suppliers of weapon and military systems.

However, as Polish end-users become more price-conscious, the life-cycle cost of procured systems and the transfer of technology to local industry are gaining importance as key factors in the coming procurement tenders. Additionally, due to Poland’s growing political role in the region, Warsaw is becoming a gateway not only to the Polish but also to Central European defence markets. Therefore, establishing partnerships with Polish industry could well provide foreign suppliers with indirect access to the wider CEE markets.

Dominik Kimla, PhD - is an Industry Analyst for Aerospace, Defence & Security practice at an international consulting firm.